Three employees of the U.S. Department of Veterans Affairs Palo Alto Health Care System and a contractor have been indicted by a U.S. grand jury in San Jose on bribery charges, federal prosecutors announced Wednesday.
U.S. Attorney Melinda Haag said Jack Stringer, 67, of Cupertino, the owner of Aero Drywall Construction Inc., is accused of bribing the three officials with cash, airline tickets and other gifts in exchange for the awarding of contracts. The three federal employees are contracting officer Tracy Marasco, 44, of Modesto, and engineering technicians Xerxes "Ike" Zapata, 65, of Daly City, and Russell Allgire, 55, of San Mateo.
Haag said the four defendants were charged in a sealed indictment filed on May 4. The indictment was unsealed on May 6. The hospital and clinic network, known as the VA Palo Alto Health Care System, has inpatient facilities in Palo Alto, Menlo Park and Livermore, and outpatient clinics in seven other South Bay locations.
The indictment alleges that Stringer gave Marasco $80,000 in cash and gifts between 2007 and 2010. It charges that in exchange, Marasco awarded Stringer's son's company a $1 million water heater contract and steered other contracts to companies that she knew would use Aero Drywall as a subcontractor.
The indictment also charges that Stringer gave Zapata cash and airline tickets and paid some of his credit card bills in exchange for confidential pricing information on construction projects and Zapata's influence in the awarding to contracts to Aero Drywall. Allgire allegedly received $35,000 from Stringer between 2007 and 2009 in exchange for steering work to Stringer and to his son's company, HUM/V Construction.
The bribery charges carry potential penalties of up to 15 years in prison if the defendants are convicted. Haag said in a news release that the prosecution resulted from a joint investigation by the inspector general of the Department of Veterans Affairs and the FBI.